JAKARTA Indonesia's economic growth in the first quarter of 2025 recorded a slowdown to 4.87 percent on an annual basis or year on year (YoY), down from 5.02 percent in the fourth quarter of 2024 and 5.11 percent in the first quarter of 2024. This slowdown was mainly due to a contraction in government spending which recorded a decline of 1.38 percent (YoY).
Head of the Central Statistics Agency (BPS) Amalia Adininggar Widyasanti, explained that all components of gross domestic product (GDP) growth grew positively in the first quarter of 2025, except for government consumption.
He said that the contraction was influenced by the effect of election spending that occurred in the first quarter of 2024.
"Last year there was an election, this year there is no election, that's one of them (the cause of the contraction)," he said at a press conference, Monday, May 5.
Amalia also highlighted the impact of budget efficiency on economic growth. According to him, some government spending has been delayed due to the reallocation process and budget efficiency so that spending does not occur in the first quarter of 2025, but will still be realized in the following quarters.
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"Of course there will be a budget reallocation which seems to have an impact that will be realized in the second quarter of 2025 and so on, because in the first quarter of 2025 there is still an administrative process to be reallocated into government activities or other economic activities," he said.
Despite the slowdown, Amalia said that this condition had been estimated by economists, given the decline in post-election shopping activities and budget efficiency measures taken by President Prabowo's administration since the beginning of the year.
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